1. (C/NF) Summary: A disciplined and effective performer in
Parliament, National Party Leader John Key has moved quickly
since taking command late last year to signal that his party
is a government-in-waiting. He has managed to unseat PM
Helen Clark as preferred Prime Minister in NZ opinion polls,
the first politician to do so since Clark became Prime
Minister eight years ago. During a lunch on June 20, Key has
told Ambassador McCormick that he views his June 26-9
Washington trip as a chance to introduce himself to U.S.
officials, explain his Party's desire to retain New Zealand's
anti-nuclear policy, and to get a better sense of how the
United States handles major world issues such as climate
change and China's rise. We believe he also regards the trip
as a way to further burnish his credentials as a statesman.
A former Merrill Lynch currency trader, Key goes out of his
way to express his admiration for the United States. End
Summary.

2. (C) In addition to meeting with the Deputy Secretary of
State and A/S Hill, Key has meetings scheduled with Deputy
USTR Bhatia, Chairman Connaughton of the Council on
Environmental Quality, and Congressman Faleomavaega. He also
hopes to meet with senior Treasury and NSC officials,
Senators Boxer, Levin, Smith, and Lugar, and Friends of New
Zealand Caucus Co-Chairs Congressmen Brady and Tauscher. He
will travel to Ottawa on
June 27 to meet with PM Harper.

3. (C/NF) Key is especially interested in discussing China's
increasing political and economic rise. His advisors tell us
this is because National recognizes that we want to cooperate
more with New Zealand in the Pacific Islands and believes New
Zealand must understand of how U.S. officials view China's
role in the region in order to more effectively work with us.
Key also told the Ambassador he has been getting policy
advice from a non-NZ Economist who specializes in China, whom
he did not name. Key would also like to discuss what the
United States would like New Zealand to do from a practical
view on defense issues. He told the Ambassador that he tends
to believe that New Zealand should do a few things well
rather than spread itself too thin, and would like to get our
take on this. Key and his advisors also say that if they are
elected they will suggest New Zealand and the United States
cooperate more on UN reform. They describe their view on the
United Nations as more pragmatic than PM Clark's, whom they
say is an idealistic globalist. They also say that the best
path to UN reform could be for the U.S. to run reform issues
through New Zealand and other small countries with good
multilateral credentials.

4. (C/NF) Key stressed many times to the Ambassador his
desire to discuss climate change and environment issues with
U.S. officials. When we asked him how National would address
these issues if elected he was a bit vague, however, only
stressing that he would reform New Zealand's onerous Resource
Management Act to make it easier to develop wind and other
alternate energy sources.

----------------------------
Background: Who is John Key?
----------------------------

5. (SBU) When John Key was elected by his caucus colleagues
as the new leader of the traditionally conservative National
Party on November 27 2006, following the resignation of Dr.
Don Brash, many commentators saw it as the fulfillment of his
political destiny. Ever since entering Parliament in 2002
following a highly successful career as a Merrill Lynch
currency trader, Key had been regarded by political pundits
as a possible future National Partly leader. A mere two
years after entering politics, Key was ranked at tenth place
in the National caucus, and was the party's spokesperson for
finance. This was an extraordinary rapid rise by a political
newcomer.

6. (SBU) After the 2005 election, Brash promoted him to
number four in the caucus in recognition of his role in

selling the party's tax package during the campaign. He was
widely identified by election watchers as the most effective
politician during the entire campaign. At the last election,
Key retained his parliamentary seat with an impressive 12,778
vote majority.

7. (SBU) Politically, John Key is considered less
ideologically strident and more moderate than his
predecessor, Dr. Don Brash. He is considered relatively
socially liberal by his colleagues and has embraced the
causes of environment advocacy and climate change, subjects
which he hopes to pursue during his Washington meetings. Just
before becoming leader, Key attended the UK Conservative
Party Conference in Bournemouth, and he has expressed
admiration for UK Tory leader David Cameron's efforts to
broaden his party's appeal. A quick and able study, Key is
likely to emulate Cameron's pragmatic attempts to soften the
image of his own historically conservative party by moving
more to the center of New Zealand politics.

-----------------------------------------
Key on Foreign Policy, the United States,
and the Nuclear Issue
-----------------------------------------

8. (SBU) Key has said publicly he believes that it is in the
national interest to have as little as space as possible
between National and Labour on matters of foreign policy.
Nevertheless, when Prime Minister Clark issued a statement
distancing herself from Duty Minister Jim Anderton's January
2007 criticism of President Bush's new policy directive on
Iraq, Key told the press he believed that Anderton was merely
repeating what he had heard around the Cabinet table. Key
has proposed more public consultation on defense goals and
strategies and a closer defense relationship with Australia,
and stressed the need to build on relationships with South
Pacific nations.

9. (C/NF) Key has worked in the United States and speaks
favorably of the U.S. He has been friendly to Mission New
Zealand and was scheduled to travel to Washington on the
International Visitor Program earlier this year but canceled
at the last minute, presumably to compete for the National
Leadership once it was clear Dr. Brash would soon be forced
out by his caucus. Post expects the United States will
continue to have a good working relationship with National
under his leadership.

10. (SBU) Soon after becoming party leader Key commented
that "I have a very much more positive view of the United
States and its role in world affairs than most ministers in
the Clark Government." He has also noted that although the
ANZUS defense alliance has "essentially been dead for 20
years now", he believes that there is scope for a
constructive relationship between New Zealand and the United
States beyond the pact. However, he also moved quickly to
clarify that a National Government under his premiership will
not change NZ's anti-nuclear policy. In his statement, Key
declared that he believes that "New Zealanders have a
long-held view that (the anti-nuclear legislation) is
important to (New Zealand's) nation-building. I think they
see it as New Zealand standing up strongly for something it
believes in. I believe in that position and I see absolutely
no reason to change it."

11. (C) Key told the Ambassador that he wishes to explain
this position to U.S. officials during his Washington
meetings. We expect he will explain that he needed to bring
his party's position alongside the Government in order to
neutralize what had been for National a political problem:
The National Party's position on retaining the anti-nuclear
legislation in the pre-Key period was vague at best and some
Nat officials suggested that they might scrap the policy if
elected. This allowed the Labour Government to score many
easy political points off National.

---------------------------------------
National doing extremely well under Key
---------------------------------------

12. (C) Under Key's leadership, National has led the Labour
Government in political polling and its margin is widening at
a considerable rate. The three most recent political polls
all show that National is well ahead of Labour Government,
with an average 20-point advantage. Much of National's
success is driven by Key's high personal popularity rating.

He has experienced an extraordinarily long honeymoon period
which shows no show of abating. Key told the Ambassador on
June 20 that he believes his success is partly due to a
series of Labour Government bungles over the past months,
such as the Philip Field fiasco, as well as a growing
electorate sense that the Government is intervening too much
in the private lives of ordinary New Zealanders. Said Key,
"Anti-smacking, removing reference to Christ from the
Parliamentary Prayer, banning junk foods in schools -- are
these big issues?"

-------
Comment
-------

13. (C/NF) As Auckland Consul General Desrocher observed in
Reftel, Key's "Nice Guy" approach at times begs the question
of how he will effectively separate himself from the Labour
Government in the minds of the electorate. But we were
struck during his lunch with the Ambassador how much he has
clearly been thinking about how to put a National-type spin
on a range of issues. While it is still far too early to
call how the November 2008 elections will play out, polls
suggest that Key is on track to be New Zealand's next Prime
Minister. His eagerness to meet with senior Washington
officials suggests that he thinks this is very likely as
well. End Comment.
MCCORMICK

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